4 Tax Tips Every Retiree Should Know To Keep More of Their Money
Written by
Vance Cariaga
Edited by
Jenna Klaverweiden
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Just about everyone can benefit from holding on to more of their money, but it’s especially important for retirees on a fixed income.
One way to keep more money is through smart and efficient tax planning. Here are four tax tips every retiree should know.
Make Qualified Charitable Distributions
Retirees who are 70 1/2 years old or older can take advantage of qualified charitable distributions (QCDs) that let you donate directly from a retirement account to a qualified charity.
In 2026, you can donate a portion of your required minimum distribution (RMD) up to $111,000 per person, according to Nev Kraguljevic, MBA, CSLP, a principal and financial planner at Elephant Corner Financial.
“This allows retirees to reduce their taxable income in a much more favorable way than taking the full RMD and then contributing cash to charity,” he told GOBankingRates.
Convert Traditional Retirement Accounts to Roth Accounts
Converting traditional IRAs and 401(k)s to Roth IRAs can help reduce your tax liability and let you keep more money — especially if you do it before age 73, when you face the RMD.
By the time RMDs begin, many retirees already have income from Social Security that can create “more taxable income than they actually need,” said Josh Kaplan, CFP, an enrolled agent (EA) and financial advisor at Armstrong, Fleming & Moore Inc.
“Although the converted amount is taxable in the year of the conversion, many retirees are in a lower tax bracket during these years than they will be once RMDs begin,” he told GOBankingRates.
Research Deductions for Outside Income
Retirees who earn extra income from business ventures or other sources should look into additional deductions to help them keep more money, Kraguljevic said.
Doing so can help you greatly increase your deductions, although it requires planning in advance.
Leverage Tax-Savings Buckets
This is another strategy that requires planning ahead. You’ll also need taxable, tax-deferred and tax-free accounts, according to Kraguljevic. A couple of important considerations are your available deductions and your modified adjusted gross income (MAGI).
“If we take into consideration that long-term capital gains for [married couples filing jointly] is $98,900 for 2026, it means that retirees can safely take income from Social Security, some income from tax-deferred accounts (whether for living expenses or Roth conversion), and some income from taxable accounts,” Kraguljevic said.
The idea is to maximize your tax brackets and deductions while also meeting your living expenses and potentially converting tax-deferred accounts into tax-free accounts.
Before using this strategy, however, it’s important to understand all the variables. “This can be a potentially tricky strategy to execute, given multiple steps, so working with a professional who utilizes tax planning is recommended,” Kraguljevic said.
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